Yeah I would agree with you there. Going down in flames and taking us down with him. And by doing so , he's definitely f'ckd himself in the process
And I always accepted that that was always going to be the case...., and to be prepared for it.
And one only has just look at their Quarterly and Year to Date figures out today and you'll see why he had to sell
I mean roughly US$921 average concnetrate sale price for the quarter based on what around US$850 in cost to NAL under the offtake. Then you have his over the top heavily legal and M&A team waited salaries in G&A cost structure and you can see why he ends up losing US$39.325 million for the year and of which US$28.113 million of that was in the last quarter. So you can see that the jettisoning of 27% of his sffing and corporate costs will save him US$10 million per year after costing himself US$1 million in severance pay now for savings of roughly $2.5 million each quarter going forward.
And I guess if you were to construe anything from that , it would be that his capacity for M&A has now been greatly diminished given his reduced in house expertise.
Equally interesting is this US$29 million of accruals at 31st December together with his Accounts payable and ' Other liabilities of a combined US$41.217 million outstanding liabilities as well as somewhat downplayed forward forecast US$32 - $48 million in further investments and advances in affiliates in the 2024 year ahead.
And its interesting that the split of concentrate sales looked to be distributed more to the JV to December than what was originally touted by the Piedmont punters in them getting their lot FIRST.
And of course we know they had re-organised and agreed if you like to this modified 50% arrangement based on KNOWN expected production , but in reality and something many did not envisaged was this idea that you can't assert a split based on FORECAST production because it has to based on ACTUALS.
And so if you have sets back and interruptions - unplanned or otherwise in production , the whole arrangement becomes interrupted if you like and has to be rearranged in accordance of even Piedmont's offtake partners schedule of receiving their concentrate. And why would they want to receive it when they know the spot price is currently in free fall and Piedmont's contracts by their own admission are currently subject to spot. So then this product then become the sale product of the JV.
So its also then interesting that in their quarterly , they rely on Sayona's update in October 2023 which projected 140,000 to 160,000 dmt from 1st July 2023 to 30th June 2024 ( so Piedmonts half year now ) and had already produced 98.8 dmt in the half to December 31st with 34.6% of that or 34.2 dmt being produced in the 4th quarter 2023 verses the 31.5 dmt ( 31.9%) produced in the interrupted ( rod mill issue ) 3rd quarter to September 30 ,2023.
And with only 72.1 dmt actually shipped , there obviously remains as we knew an approximate balance of 26.7dmt which was shipped in January and which Piedmont is claiming under the offtake a total of 3.1 thousand metric dmt - therefore leaving the other 13 thousand odd PLUS the carry fwd production balance not reflected in these year to date figures which was produced prior to 1st July 2023.
In any even , it is obviously clear that this block sale of Piedmont's stake is more about them than it is about us ....unless its a preemptive move to exodus the JV at some point as well during the first half of 2024 and which is not likely given their quarterly narrative on its JV's and the fact it has nothing else.
So given the fact that US89 million got us 60% stake in Moblan , it remains to be seen if Piedmont's net cash position AFTER it settles its accruals and payments to the NAL JV ...., whether it can BUY itself another project based on the current climate in Lithium.
(20min delay)